PILCORP LTD

Abstract

The case focuses on the method of evaluating leases from the lessor's point of view. Burhan Khan, Senior Marketing Officer of Pilcorp was asked to explore the feasibility of a lease swapping proposal by American Express Banking Corporation. This included the calculation of a cost of capital for the company and the identification of relevant cash flows. The decision could then be made by estimating the NPV of the lease or by calculating the IRR and comparing it to the cost of capital. The case also provides students with a brief background of the leasing industry in Pakistan.